The mirage of transformation

How is it possible that despite decades of businesses ‘transforming’ that in so many instances, core process performance remain little changed and there is limited engrained organisational capability to drive improvement continuously? How often do we see a new CEO launch a new transformation ‘program’ that seems to barely leverage any improvement infrastructure or capability of its predecessor? Transformations rarely involve a shifting of focus or refinement of approach within existing structures and capabilities but more frequently result in a reconstruction from the ground up – accompanied by a new army of consulting associates.

Why does this occur with business improvement more than other organisational processes?

This cycle of reset and poor capability retention seems to beset business improvement more than any other organisational capability. While leaders often rue the need to bring in external experts to drive the improvement cycle, they equally fail to construct and embed the necessary building blocks to deliver a sustainable capability to continuously improve. In most cases leaders know exactly what they need to do – they just need to replicate their leadership, business and people processes in other business areas such as workplace safety.

Completing improvement work is at the heart of any business improvement capability

At the heart of any effective and sustainable business improvement capability is the efficient execution of improvement work. Without completing improvement work there is no improvement. While a seemingly obvious statement, surprisingly this is easily forgotten or diluted over time – ultimately leading to the ‘flame out’ of improvement outcomes. Focus can so easily shift to all of the other ‘stuff’ (communication, training, reporting, meetings, audits etc etc) that surrounds and supports business improvement work. The sad and repeated outcome is that actually completing business improvement work moves from being the main event to being a sideshow.

At its most primal level, to complete improvement work there needs to be a scope (objective), a timeframe, an allocation of resources (physical and financial), and a measurement to define targets and progress. A business improvement capability that fails to perform at this most primal level will not deliver nor will it be sustainable.

The four key questions around improvement work determining effectiveness and sustainability

However, delivering against these primal needs is a necessary but not sufficient requirement for an effective and sustainable business improvement capability. Experience suggests that four additional questions need to be systemically answered in order to deliver business improvement effectiveness and sustainability.

– In an environment of resource constraint – what improvement work gets done and how are trade-offs managed?
– How are the outcomes of improvement work embedded, controlled and sustained?
– What resources are made available and how capable are they to complete targeted improvement work?
– How are improvement outcome and employee efforts shared and recognised?

While many organisations attempt to answer these key questions around improvement work, so often the solutions are bespoke and/or an appendage to existing business and people processes. In many cases leadership defers to the central business improvement team to answer these questions or by extension the external consultant supporting them. However, the most successful and sustainable business improvement capabilities are forthcoming when these key questions are answered at the intersection of established and embedded business and people process by the ‘natural’ organisational owners of these processes.

Established business processes need to answer the first two questions

The cascade of strategy, into business planning and subsequently into prioritised resource allocation is a well-established business process. Unfortunately, in many cases business improvement work is not well integrated into this focused resource allocation cascade. The outcome is that at the points of departure, business improvement moves from being an enabler of business strategy to going into competition with it. A transformation that measures success by the number of projects in progress or the % of employees engaged in ‘improvement’ can contribute to this misalignment. A project selection process overly influenced by unstructured ideation is another cause.

Business planning is the backbone or spine for a sustainable improvement capability and leadership own strategy and planning as a business process – an accountability that can’t be outsourced. The most effective cascade occurs when leaders are managing hard outcomes in relation to a small number of business value drivers (critical few programs) that are each the focus of targeted projects that are working in concert to deliver improvement. This is where the top down focus and the bottom up engagement are most aligned to deliver real value.

The performance of business improvement work and the anchoring of improvement outcomes is most sustainable when it occurs within the context of established business control, change and risk management processes. It is the accountability of finance teams to ensure that improvement business cases are coherent and that sustainable value is delivered. It is the role of operations management to ensure that there is robust process and change controls to both absorb and anchor improved outcomes. Improvement that occurs outside these established business systems loses authenticity over time, can inadvertently increase business risk and ultimately becomes the fodder for the next cycle of transformation.

Established people processes need to answer the latter two questions

When delivering against high consequence capital projects, leadership tends to focus more clearly on the resourcing and capabilities required to deliver successful project outcomes. However, much of this leadership clarity is diluted when it comes to building an enduring business improvement capability. There are no pre-qualifications for participating in continuous improvement. Rarely is building improvement skills an embedded part of a developing leader’s skills matrix. While low hanging improvement ‘fruit’ can be plucked with the brute force of management focus, this rarely drives sustainable outcomes. It is the accountability of learning and development teams to ensure that building business improvement capabilities in planning, project management, process improvement, and process management are core to the learning development journey of employees.

Engaging the hearts and minds of employees and rapidly shifting improvement ideas from one part of an organisation to another is a critical part of the social fabric of a vibrant organisational culture. But it is just that – a part of the fabric. Efforts to create reward and recognition and knowledge sharing processes aside from normal organisational processes may on one level appear to be elevating the importance of improvement or transformation, but on another level is actually sowing the seeds for its temporal demise. It is the role of human resource to support leaders in integrated and consistent approaches to hard and soft rewards for employees delivering improvement. It is the role of the internal communications to profile and share the positive energy of improvement and those that deliver it. Ensuring improvement knowledge is shared in a vibrant manner and stored in a structured way is a key focus of central business improvement teams.

The role of central business improvement teams

Central business improvement teams play an important role in helping build a sustainable continuous improvement capability. However, if they find their names on the action list to build improved business and people processes then it is unlikely they are building an integrated, enduring and sustainable business improvement capability within their organisations. Their role is to get natural organisational owners of critical business and people processes to ‘step up the plate’ and embed improvement capabilities into their day-to-day business and people processes. This is the most effective pathway to a sustainable improvement infrastructure and capability. This enables CEO’s to provide appropriate shifts in focus and emphasis in response to a constantly changing external and competitive environment.